Federal Labor’s divisions have sharpened over income tax and energy policy, while NSW Labor leader Jodi McKay has been told to resign or be pushed, as the fallout from Saturday’s state byelection in Upper Hunter reverberates throughout the party at all levels.

While Opposition Leader Anthony Albanese dismissed claims by the government and some of his own MPs there were implications for his party in the result, powerbrokers in NSW offered Ms McKay the opportunity “to reflect on what happened and then stand down”.